Short selling and stock returns: evidence from the UK

The practice of shorting stocks was put forward as one of the causes of the recent financial crisis whereas Shiller (2003), for example, considers shorting an essential element of an efficient market. Shorting involves selling borrowed stocks and subsequently closing the position by purchasing and r...

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Main Authors:	Mohamad, Azhar, Jaafar , Aziz, Hodgkinson, Lynn, Wells, Jo
Format:	Article
Language:	English
Published:	ELSEVIER 2013
Subjects:	HG4001 Financial management. Business finance. Corporation finance. HG4501 Stocks, investment, speculation
Online Access:	http://irep.iium.edu.my/28461/ http://irep.iium.edu.my/28461/ http://irep.iium.edu.my/28461/ http://irep.iium.edu.my/28461/4/Short_Selling_and_Stock_Returns_Evidence_from_the_UK.pdf

id	iium-28461
recordtype	eprints
spelling	iium-284612013-09-12T02:28:06Z http://irep.iium.edu.my/28461/ Short selling and stock returns: evidence from the UK Mohamad, Azhar Jaafar , Aziz Hodgkinson, Lynn Wells, Jo HG4001 Financial management. Business finance. Corporation finance. HG4501 Stocks, investment, speculation The practice of shorting stocks was put forward as one of the causes of the recent financial crisis whereas Shiller (2003), for example, considers shorting an essential element of an efficient market. Shorting involves selling borrowed stocks and subsequently closing the position by purchasing and returning the stock to the lender. A profit will be realised if the stock’s price decreases. Shorting enables investors who do not own a perceived overvalued stock to sell. Using a high frequency UK dataset for the period between September 2003 and April 2010, our findings suggest shorting indicates evidence of overvalued stocks as significantly negative abnormal stock returns appear to follow an increase in shorting. These results do not hold, however, for shorting which occurs around the ex-dividend date. We further find that these results hold during the recent financial crisis. ELSEVIER 2013-06 Article PeerReviewed application/pdf en http://irep.iium.edu.my/28461/4/Short_Selling_and_Stock_Returns_Evidence_from_the_UK.pdf Mohamad, Azhar and Jaafar , Aziz and Hodgkinson, Lynn and Wells, Jo (2013) Short selling and stock returns: evidence from the UK. The British Accounting Review, 45 (2). pp. 125-137. ISSN 0890-8389 http://www.journals.elsevier.com/the-british-accounting-review/ 10.1016/j.bar.2013.03.001
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG4001 Financial management. Business finance. Corporation finance. HG4501 Stocks, investment, speculation
spellingShingle	HG4001 Financial management. Business finance. Corporation finance. HG4501 Stocks, investment, speculation Mohamad, Azhar Jaafar , Aziz Hodgkinson, Lynn Wells, Jo Short selling and stock returns: evidence from the UK
description	The practice of shorting stocks was put forward as one of the causes of the recent financial crisis whereas Shiller (2003), for example, considers shorting an essential element of an efficient market. Shorting involves selling borrowed stocks and subsequently closing the position by purchasing and returning the stock to the lender. A profit will be realised if the stock’s price decreases. Shorting enables investors who do not own a perceived overvalued stock to sell. Using a high frequency UK dataset for the period between September 2003 and April 2010, our findings suggest shorting indicates evidence of overvalued stocks as significantly negative abnormal stock returns appear to follow an increase in shorting. These results do not hold, however, for shorting which occurs around the ex-dividend date. We further find that these results hold during the recent financial crisis.
format	Article
author	Mohamad, Azhar Jaafar , Aziz Hodgkinson, Lynn Wells, Jo
author_facet	Mohamad, Azhar Jaafar , Aziz Hodgkinson, Lynn Wells, Jo
author_sort	Mohamad, Azhar
title	Short selling and stock returns: evidence from the UK
title_short	Short selling and stock returns: evidence from the UK
title_full	Short selling and stock returns: evidence from the UK
title_fullStr	Short selling and stock returns: evidence from the UK
title_full_unstemmed	Short selling and stock returns: evidence from the UK
title_sort	short selling and stock returns: evidence from the uk
publisher	ELSEVIER
publishDate	2013
url	http://irep.iium.edu.my/28461/ http://irep.iium.edu.my/28461/ http://irep.iium.edu.my/28461/ http://irep.iium.edu.my/28461/4/Short_Selling_and_Stock_Returns_Evidence_from_the_UK.pdf
first_indexed	2023-09-18T20:41:58Z
last_indexed	2023-09-18T20:41:58Z
_version_	1777409424816603136

Short selling and stock returns: evidence from the UK

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